There are currently two programs offered to assist the building rehabilitation projects of both private residential homeowners and owners of income-producing properties. These programs offer tax credits ranging from 10% to 25% of the cost of rehabilitation. Tax credits differ from tax deductions in that the tax credits are a dollar-for-dollar reduction in what you owe in taxes. For example, if you were to spend $40,000 on approved work, you could receive up to a $10,000 credit against what you owe in taxes.
The table below breaks down exactly how these credits work.
|Not Certified||10% Federal
Must be built before 1936
|Certified Historic Building||20% Federal + 5% State||25% State|
* Non-residential refers to buildings not held exclusively for a private residence by the owner. A good rule of thumb is if you can depreciate your building then it qualifies as non-residential.
** Residential homes that are not listed in the state or national register can still qualify for the 25% State tax credit. The state only needs to determine that your house is eligible for listing in the state register.
Questions on tax credits? Visit our FAQ.